Luxottica yesterday said it was doubling its stores in China,announcing its second deal in the region in recent months.The Italian eyewear company owns brands such as Ray-Ban and manufactures glasses under licence from names that include Versace and Prada.It said it was acquiring Ming Long Optical for about $ 35.8 m,adding to Luxottica's presence around Beijing and Hong Kong .
Andrea Guerra,Luxottica chief executive,said although the size of the deal was small,the important thing was the number of stores.Luxottica would now have 278 stores in China,a market it expected to grow rapidly.
Mainland China and Hong Kong account for about 1-1.5 per cent of groups sales.Luxottica said last week its sales in the first six months were $ 3.6 bn.Comparable store sales were up 6 percent on the same period last year.
Luxottica manufactures ,some of its eyewear in China,although about 85 percent of its branded products are made in Italy.Only 5 percent of turnover comes from Italy.Luxottica and other have to weight hte loss of the " Made in Italy " label on their goods,with the consequent possible change in consumer perceptions.
Mr Guerra said the " Made in Italy " labe was a requirement of many companies that sold licences to Luxottica,but he believed thatwould change,as would consumer attitudes.
"In the next 10 years ,it will be more important for the product to say " Made By Luxottica' than ' Made in Italy " Mr Guerra stressed the company remained committed to Italian production though it would be increasing the percentage of goods made in China.It has 5.500 staff in Italy,about 10 percent of its worldwide staff.
The Armani group yesterday underlined the growing importance of China to the luxury goods market,saying revenues in the region wer up 38 percent in the first half of the year compared with the same period in 2004.
Armani,which is privately owned,did not put a figure on China sales.Total group revenues for the half were almost $ 770 m,up 8 percent,while earnings before interest and taxes wer almost $ 130 m. up 10 percent.
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